What’s the Deal: Shaking Up Retail Outside Manhattan

While stores in Manhattan are enjoying strong sales and rising property values, the retail sectors in the outer boroughs are underperforming the rest of the country, according to a new report from Eastern Consolidated.

The report projects that retail sales in Manhattan will come to $97.3 billion in 2012. On a per capita basis, that’s 247% better than the average for the U.S., the report states.

On the other hand, per capita sales in the Bronx, Brooklyn, Queens and Staten Island will be 50%, 24%, 25% and 5% below the national average respectively this year, the report says.

Report author Barbara Bryne Denham says that the disparity mostly reflects differences in supply. More retail space would be supported by the populations and the per-capita incomes in the Bronx, Queens, Brooklyn and Staten Island, she says. As a result, residents of those boroughs often shop in other areas. “The outer boroughs are woefully underrepresented,” Ms. Denham says.

The good news is that development in the boroughs has been increasing in recent years and there’s more in the pipeline. Retail centers under way include the Mall at Bay Plaza in the Bronx; City Point Mall in Brooklyn; and the Charleston Municipal Site in Staten Island.

The report says the city’s retail sector overall has a strong source of growth. Since the end of 2009, the sector has added more than 85,000 jobs, which account for 39% of the total city job growth during that period. Also, overall retail sales have nearly doubled since 2002, the report states.

In Manhattan, the fourth quarter of this year is expected to be “a banner quarter” in terms of sales of retail property, according to the report. An estimated $1.5 billion in deals will either close or be on the verge of closing, a record volume. That compares with about $250 million per quarter for the past three years, the report states.
—Carmel Melouney